War in the Middle East has led to a pause in advertising from some of the brands, the photo messaging app reports.
Snap has snapped a revenue of $1.19 billion for Q3FY23 which is 5% higher than what the photo messaging app had posted during the same period last year.
Along with the revenue spike, it now has 406 million daily active users (DAU), an increase of 43 million, or 12%, year-over-year.
“We are focused on improving our advertising platform to drive higher return on investment for our advertising partners, and we have evolved our go-to-market efforts to better serve our partners and drive customer success,” said CEO Evan Spiegel.
He lauded retiring COO Jerry Hunter, “I am deeply grateful to Jerry for the meaningful contributions he has made over his many years at Snap. His work to improve our advertising platform, serve our community, and build a strong team has helped lay the foundation for our future growth,” remarked Spiegel.
The CEO, regarding the Q4FY23 outlook, sees an incoming advertising demand remains limited due to several factors. He, in the earnings call, explained:
First, revenue in Q4 is historically backweighted, and the revenue mix in Q4 has historically included a relatively higher share from brand advertising revenue, and brand advertising grew at a slower rate than direct-response advertising in Q3.
In addition, we observed pauses in spending from a large number of primarily brand-oriented advertising campaigns immediately following the onset of the war in the Middle East, and this has been a headwind to revenue quarter-to-date.
While some of these campaigns have now resumed, and the impact on our revenue has partially diminished, we continue to observe new pauses and the risk that these pauses could persist or increase in magnitude remains.